- Cardano saw a bearish market structure break just days before BTC’s downturn.
- Liquidation levels showed that a bullish reversal could occur next week.
Cardano [ADA] Bulls tried valiantly to push prices higher, but the crypto market had other ideas.
A Bitcoin [BTC] The rejection at the $70,000 resistance on Monday, July 29 was followed by an 8.37% price drop and was trading at $64,000 at the time of writing. Like many of the major altcoins, ADA also suffered.
The market structure on the daily time frame has been bearish since last week, after falling below $0.4145. The recent market-wide losses reinforced the bearish position.
Cardano was bearish even before the recent price drop
Source: ADA/USDT on TradingView
The falling wedge pattern (orange) had a bullish breakout in mid-July. Buyers briefly turned around the $0.4 zone for support, but prices fell below that just a few days later on July 25. The OBV has been in a steady downward trend since April.
The MACD climbed above the neutral 50 as prices rose above $0.4, but formed a bearish crossover soon after. This momentum shift, combined with a lack of buying pressure, meant that ADA is likely to slowly slide towards the local low at $0.34.
A range formation in the region of $0.34-$0.4 in the coming weeks, alongside rising OBV, would be a sign of accumulation.
A reversal of course at Cardano is said to be imminent
The one-month liquidation heatmap showed that the $0.378 was a significant liquidity pool. It attracted ADA, which meant the local soil was close. A similar price action took place in the last week of June.
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A dip below $393 to $0.383 before a bullish rebound. Bulls may be hopeful that a similar scenario will unfold next week, provided Bitcoin can defend the $64k support zone.
The target for such a reversal would be $0.432.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.